Introduction to Management

Professor Ming Sun

School of Energy, Geoscience, Infrastructure and Society

Heriot-Watt University

MEANING OF MANAGEMENT

Definitions of Management • "Management is an art of knowing what is to be done

and seeing that it is done in the best possible manner."

(F.W. Taylor)

• "Management is to forecast and plan, to organize, to

command, to coordinate, and to control." (Henri Fayol)

• “Management is defined as the process by which a co-

operative group directs action towards common goals”

(Joseph Massie)

More Definitions • "Management is the coordination of all resources

through the process of planning, organising, directing

and controlling in order to attain stated goals." (Henry

Sisk)

• "Management is a process of working with and through

others to achieve organizational objectives in a

changing environment, central to this purpose is the

effective and efficient use of limited resources." (Rovert

Kreitner)

Essential Features of Management

• Taking place within a structured organisational

setting with prescribed roles

• Directed towards the attainment of aim and

objectives

• Achieved through the efforts of other people;

and

• Using systems and procedures

Common Tasks of Management

• Planning

• Organising

• Commanding

• Coordinating

• Controlling

Some writers combine Commanding and Coordinating as Leading to

produce a POLC framework of management.

Planning • Setting objectives and how to achieve them

– About the future.

– Different timeframe (long-term, medium-term, short-term).

– Different levels (strategic, tactical, operational).

– Uncertainties are inevitable.

– Plan needs to be reviewed.

Organising

• Organising resources to achieve business

goals

– Setting up organisation structure

– Deciding the flow of tasks

– Allocating human and capital resources

– Deciding line of command

Commanding

• Influencing people to work towards achieving

set objectives

– Directing staff

– Communicating with staff

– Negotiating with staff

– Motivating staff

Coordinating

• Unifying and harmonising all activities and effort

of the organisation to facilitate its working and

success.

Controlling • Monitoring activities and taking corrective actions if

necessary

– Establishing performance standards or benchmarks

– Determining methods of measuring performance

– Measuring actual performance

– Comparing performance to established standards

– Taking corrective action when necessary and regularly reviewing performance

Principles of Management

1. Division of work

2. Authority and responsibility

3. Discipline

4. Unity of command

5. Unity of direction

6. Subordination of individual interest

7. Remuneration

8. The Degree of Centralization

9. Scalar Chain

10. Order

11. Equity

12. Stability of Tenure of Personnel

13. Initiative

14. Esprit de Corps

Henri Fayol established14 principles of management:

DIFFERENT APPROACHES TO

MANAGEMENT

Adam Smith’s Contribution To The

Field Of Management

• Wrote the Wealth of Nations (1776)

– Advocated the economic advantages that organizations and society would reap from the division of labor:

• Increased productivity by increasing each worker’s skill and ability.

• Time saved that is commonly lost in changing tasks.

• The creation of labor-saving inventions and machinery.

The Industrial Revolution’s Influence On

Management Practices • Industrial revolution

– Machine power began to substitute for human power • Lead to mass production of economical goods

– Improved and less costly transportation systems became available

• Created larger markets for goods.

– Larger organizations developed to serve larger markets

• Created the need for formalized management practices.

Main Management Theories

Classical Approach to Management

• Including scientific management and bureaucracy

• Emphasis on purpose, formal structure, hierarchy of

management, technical requirements, and common

principles

• The belief is:

– There is a best machine for each job, so there is a best working

method by which people should undertake their jobs

– All job processes should be analysed into discrete tasks & via

this management find the ‘one best’ way to perform each task

Scientific Management (Taylorism or

Fordism)

• Emphasises organisational efficiency to increase

organizational success.

• Analyses each person’s work in a scientific way

• Scientific selection, training and development of the

workers

• Defines ways of co-operation between workers

• Clear division of work and responsibility

Criticism of Scientific Approach

• The main criticism of this approach is that each worker

only perform a single task, which can be very repetitive

and boring.

Bureaucracy – the Main Features

• Specialisation: every employee should perform a

single function

• Hierarchy of authority: Duties and responsibilities of

each job and its relationship to other jobs should be

clearly defined.

• System of rules: Operations and processes are

defined as rules.

• Impersonality: Little consideration for people who

perform the jobs.

Criticisms of Bureaucracy

• Over-emphasis on rules and procedures

• Initiatives may be stifled by inflexible rules

• Leads to typical inefficient bureaucratic

behaviour

• Impersonal relations

Criticisms of the classical approach

• Insufficient account taken of personality factors

• Creates organisational structures where people

can exercise only limited control over their work

environment

Human Relations Approach to

Management

• The behavioural approach to management is a

management approach that emphasises increasing

organizational success by focusing on human variables

within the organization.

Human Relations Approach

• Is based on the consideration of the social factors at

work and the behaviour of employees within an

organisation

• Particular importance is paid to the informal

organisation and the satisfaction of individuals’ needs

through groups at work

• Hawthorne experiments acted as a turning point in the

development of the Human Relations movement

Human Relations Approach – the

Criticisms

• The positivists assumptions were exposed, however, by modern

standards of social research the human relations approach at the

time was viewed to be methodologically questionable.

• In particular, it failed to take sufficient account of wider

environmental factors - context

• Insufficiently scientific!!!

• The Hawthorne experiments were, and still are, argued to lack

rigor

• For some, this approach was still overly pro-management and

output driven rather than a real emphasis on people and human

development – see humanists!

The Systems Approach

• Attempts to reconcile the classical (organisations without

people) and human relations approaches (people without

organisations)

• Balances the technical demands of a company alongside the

psychological and social needs of its employees

• Attention is focused on:

– the total work of the organisation

– the inter-relationships of structures & behaviour

– the range of variables within the organisation

• The organisation is viewed within its total environment and the

importance of multiple channels in interaction is emphasised

Systems Approach: Advantages and

Disadvantage

• Advantages

– Systematic analysis of problems and management solutions

– Revealing the complexity of management

– Encouraging integrated management solutions

• Disadvantages

– Over-conceptual

– Not specifying the nature of interactions between parts of a

system

– Difficult to apply to practical problems

The Contingency Approach

• Views the structure of an organisation and its

success as dependent on: – the nature of tasks that are undertaken

– Organisation strategy

– Subordinates’ characteristics

– the nature of environmental influences

• There is no one best way to structure or

manage organisations - it is dependent on the

contingencies of the situation

Other Modern Approaches

• Management thinking is continuously evolving

• New business practices pose challenges to the

established management theories

• The emphasis for management today is to manage

continuous change against the background of a

dynamic environment

Learning Outcomes • Students should understand the meaning and essential features of

management and its relevance to business practice

• Students should know the main tasks of management and their application in a business management setting, such as managing construction projects

• Students should have knowledge of the main management principles, as suggested by Fayol;

• Student should gain knowledge of the different approaches to management; and be able to compare the different approaches, including:

– Classical approach

– Human relations approach

– Systems approach

– Contingency approach